Should You Trust "We Buy Houses in Cash" Businesses?
October 5, 2020
You drive down the street and lose yourself in overwhelming thoughts about your never-ending responsibility. The horrible reality of overwhelming bills/debt is slowly sinking in. You are reflecting on your dwindling cash reserve when you see a sign that says "We're buying houses for cash". This piques your curiosity: Could I really sell my house for cash almost immediately? You have considered selling your home in the past, but the process seems extremely stressful. Should you call the company on the sign or is it too good to be true, what's the catch?
Flyers on telephone poles or signs with the words "We're buying houses" in bold may seem daunting, but feel free to believe that these companies are a legitimate part of the property market. The reality is that "We Buy Houses" businesses are not for everyone, but they can be extremely useful for those in a predicament like the one just given.
These companies buy homes at a price slightly below the current market value, perform necessary repairs, and sell the improved property for a profit. If selling your home on the traditional market is not a viable option, this can be a good way for distressed sellers to free themselves from the burden of selling their property, home, or house.
How do “We Buy Homes” companies work?
Buyers in "We Buy Homes" businesses look for distressed sellers who might be interested in selling their home under the market value in exchange for a speedy and hassle-free no strings attached sale process. When a seller expresses their interest in selling their home for cash, they will work with the company to set up an appointment for the buyer to view the property. The buyer will then estimate the value of the house and make a no-obligation offer available in cash. If the seller takes the offer, the buyer will prepare a buyer's contract without the need for real estate agents or commissions.
What kind of Homeowners are the “We Buy Houses” companies looking for?
There can be several different reasons a person might decide to sell to a We Buy homes company; we found that in most of the cases, the seller is not able to sell their house in the traditional market and wants to sell the house quickly. If a loved one passes on unexpectedly, someone could inherit a home unexpectedly but lacks the time or energy to do repairs and get the home on the market. If a home is in disrepair, to avoid massive costs in repairs, a homeowner might choose to sell their home for cash.
Divorced couples who need to move quickly can benefit from deciding to sell their previously shared home to a “We Buy Houses” firm. An unforeseen financial situation or unexpected bills can cause someone to sell their home in order to get cash quickly and to make ends meet. Regardless of the situation, most of these home sellers feel overwhelmed and stressed out, which is why these companies are helping to take that burden off their shoulders by making the process easier. But how can they pay cash for my home?
Home buying companies are usually in the Fix and Flip business, which means they should have done enough business beforehand in order enough cash in their account to buy the house. As in any industry, there can be scammers and people trying to take advantage of you. If you need to sell your house or property quickly for cash, knowing which companies are watching your interests and operating ethically is important. Trusted companies use the cash they already have in their account to buy a seller's home. That cash is often the proceeds from past properties have they turned over.
The company may also have obtained a hard cash loan, which is an asset-based loan. With hard cash loans, the loan is based on the property that serves as collateral rather than other applying factors such as a credit score. The money the company uses to buy real estate can also come from angel investors who have decided in investing in the company. An angel investor invests in a company he thinks is profitable; the company has consistently satisfied customers and generates steady business.
Watch out for the We buy houses scams
Intelligent people are constantly being tricked into "We Buy Houses" scams, so it's important to do your research beforehand and know what questions to ask. If you see an “I Buy House” or a “We Buy Homes “ sign make sure you check if they have their company name listed on the sign. Usually, the fly by night companies only includes their phone number that is usually untraceable.
If you did see a company name then check them out online. Look for reviews or testimonials and check if they are hiding anything. Look for good social proof, a legit We Buy Houses company will have several different media outlets.
If you can't find any information about a company online, it is very much possible that it is a scam that is illegal and untraceable. It's easy to search the Better Business Bureau and see if the company is an accredited company. The Better Business Bureau also provides ratings and feedback. If you can't easily go to a website to learn about the company, and the company isn't a Better Business Bureau accredited company, it is in your best interest to avoid this company.
Why “We buy houses” businesses are not for every seller
When a seller decides to sell to a "we buy houses" company, it is usually for one of two reasons: because they are in a stressed financial position where they need money quickly, or they can´t handle the stressful burdens of selling their house. "We Buy Houses" companies do not meet every seller’s needs. It is important to first consider your needs when it comes to selling a home before making a decision to sell to a house buying company or on the traditional market.
Not all "we buy houses" firms are created equal, many operate in very different ways, and unfortunately some will seek to take advantage of the sellers. Nevertheless, you should do the necessary research in advance and trust your gut feeling! If something does not suit you, it is important to seek clarification.
Contracts should never be signed unless you know what they mean. Unfortunately, some of these companies have insidious ways of slipping out of a contract. These contingencies can include: a number of days for a buyer to obtain financing, need for approval from a lender, an estimate of a certain value, the cost of any repairs, and the need for a home inspection.
Even though some people have had a bad experience with a "We Buy Homes" company doesn't mean they are all bad. Many “ We Buy Homes” companies have a skilled team, an office, and will work with you to sell your home in 7 days or less- these combinations make up a trustworthy business.
Do you remember how we started this blog with the scenario when you were driving stressed out and feeling overwhelmed? You were wondered if selling your home could ever be an option and how could you get started. Now imagine feeling stress-free and confident knowing that you made the right decision to sell your home and that you are working with a legitimate home buying company.
Should you decide to work with a house buying company, you now have the resources and tools to search for a reliable company that will sell your house quickly and gives you the money you need. You now have the satisfaction of knowing that it is possible to finally feel financially free by selling your home for cash. You can sell your home, feel assured that We Buy Homes businesses are legitimate, and you could easily have cash in your bank in a few days!
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